Islington Council has been accused of profiting from “murder” after an investigation by Islington Now revealed that the authority has nearly £5m invested in companies dealing in the arms trade.

Figures obtained under the Freedom of Information Act show that at the end of last year the council’s pension fund held £4.9m of shares with seven key players in the defence industry.

More than a third of the investments (£1.92m) is in BAE Systems, Europe’s largest defence firm. The company has been at the centre of controversy in recent weeks for producing parts of the F-16 fighter planes used to bomb the Gaza strip and cluster bombs recently outlawed under the International Convention on Cluster Munitions.

Campaign groups branded the figures “shocking”. Michael Johnson, who works with Campaign Against the Arms Trade (CAAT), said: “It’s not just that these companies make weapons. They make money out of murder – and so does the council.

“There’s been a major outcry against the bombings in Gaza. BAE trades with Israel and Gaza, they have offices there. Where is the action that says: ‘We’re not going to profit from the murder of Palestinians?’”

Local politician Jon Notts, a former Green Party parliamentary candidate for Islington North, insisted it was unacceptable for public bodies to invest in an industry that supported unethical powers abroad.

He said: “The Green Party is fundamentally opposed to the arms trade and the sale of weapons to oppressive regimes. We are against central or local government investing in this sector in any capacity.”

The council’s pension fund, which represents more than 5,000 members of staff and former employees, states that it aims “to promote corporate and social responsibility” in its investment strategy.

But the local authority has claimed that its greatest responsibility is to its investors.

A council spokesman said: “Islington’s pension fund is regulated by law. The council, acting as a trustee of the pension fund, is legally bound to get the best return on investments and reduce the burden on council tax payers. This is the case for all local government pension schemes across the country.

But campaigners argue that ethical investment funds have matched the FTSE 100 over recent years and can actually outperform other investments over long periods.

The revelation comes in the wake of a growing trend in public bodies towards more ethical investment policies. In 2006, a report by the CAAT found that 45 universities held more than £15m in companies involved in the arms trade.

Since then, many of them have bowed to pressure from students and campaign groups to withdraw their investments, including SOAS, Goldsmiths, the University of Manchester, University of Wales, Bangor and St Andrews, as well as the previous biggest investor, University College London.

The total value of the council’s pensions fund at the end of last year was around £560m, meaning that arms investments amount to less than one per cent of the total. CAAT argues that this is all the more reason to withdraw them.

Mr Johnson, 29, said: “It’s such a tiny proportion of the overall investment that selling the shares isn’t actually going to prejudice the overall fund’s value. It’s going to make more difference to BAE in terms of their reputation and how other funds view holding their investment than it’s going to make to Islington.”

But Unite, the largest trade union in Islington which represents many of those with investments in Islington’s pension fund, refused to condemn the council. A spokesman said: “We don’t have a position on the matter.”

The girl sits on the bed, spine arched backwards, leg kicked high in the air. Dressed in denim shorts and black leather boots, her slim frame is tanned and lithe. She seems amused at her own audacity: her mouth is open in a cabaret gasp, her tongue licking her lips suggestively while wisps of blonde hair frame her face.

This photograph, by Valerie Phillips, is one of 68 currently on show in Jaguarshoes bar, near Old Street. The exhibition, entitled “You’re so sexy baby – shut the fuck up” is made up of photographs of Lacy, a girl from Oklahoma, whom Ms Phillips met while researching one of her books and who has since become one of her most prolific subjects. What has caused controversy is that in most of the pictures, Lacey is between 13 and 16 years old.

The previously unseen images range from Lacey looking after horses on a farm to more controversial images of her in a glamourous dress posing on a table or wearing a bikini in a swimming pool. The images are possessing, attractive, and so all the more disturbing when a second glance reveals that the seductress is a nymphet in her early teens. Yet outright condemnation misunderstands the issue.

The exhibition, which takes its title from a conversation between Lacy and her boyfriend at the breakfast table, in which he said “You’re so sexy baby”, to which she replied “shut the fuck up”, has been met with mixed reviews. The bar reports to have received several comments from customers perturbed by the pictures, although no official complaints have been lodged.

Steve, a barman at Jaguarshoes, says that one of them was from a man purporting to be from the NSPCC, which has offices nearby. He says: “Yeah, he wasn’t too happy about it. But that’s art – that’s what it’s supposed to do.” The NSPCC say that they have no official position on the matter.

Ms Phillips, an internationally-recognised photographer who divides her time between New York and London, says she is baffled by the complaints. “I always think it’s really funny that something so uncontroversial could cause so much controversy,” she says. “People aren’t comfortable with portraying the natural process of growing up. People want to be alarmed by things that aren’t the slightest bit alarming.”

As a professional photographer, Ms Phillips has published four books of her own work, as well as fashion shoots for British Elle, Nylon magazine and artwork for the single Indian Summer by the Manic Street Preachers. She believes that many people are uncomfortable with real-life depictions of teenage sexuality outside of the mainstream media.

She says: “I think it’s really interesting that people can deal with it when it’s a big celebrity on a poster in a bus shelter. Meanwhile I’ve got this girl who for all intents and purposes isn’t wearing anything particularly revealing who’s in her mid-teens and suddenly people are shocked.”

However, punters at the Jaguarshoes bar seemed unfazed by the collage of pictures across the walls. Maria, 23, from Old Street, says: “There’s so much art that’s more provocative than that. All girls try to be sexualised at that age.”

Rob, 24, who lives nearby, thinks people are only uncomfortable because of their own reactions. Pointing to one that shows Lacey dressed in a bikini lying in a swimming pool he says: “At first I thought: ‘That’s fit’. Then, when I saw how old she was, I thought: ‘Oh, that’s a bit wrong.’ But I think it’s excessive for people to complain.”

A spokesperson for Jaguarshoes says: “We have received no formal complaints and do not expect to.”

Sitting across the sofa from Asa Butterfield it is hard not to feel very young. The 11-year-old star has the uncanny ability, common to so many pre-pubescent boys, of reducing me to my gawky teenage self.

“So what do you want to ask?” he says, fixing me with his blue eyes. His blithe unawareness as to why I want to talk to him makes every question seem trivial.

We are sitting in the basement kitchen of his home in Islington, north London, while his Mum, slightly confusingly called Jake, cooks dinner. In this homely setting it is hard to imagine him as Bruno, his character in The Boy in the Striped Pyjamas, staring through the barbed wire fence into the horror of a Nazi concentration camp.

But Asa is a born actor. Listening to him describe acting in a film about the holocaust, it is hard to believe that director Mark Herman chose him for the part because of his innocence to the subject matter.

“The last scene was horrible; I almost threw up,” he says. “It felt like I was going through it, though nowhere near as bad.” But the role has brought him fame, two nominations for a British Film Award and a London Critics Circle Film Award.

This part is the latest in a long string of parts that would make many grown actors turn green with envy. Asa has been acting since the tender age of seven at the Islington-based Young Actors Theatre, where he got his first part in the 2006 television drama After Thomas, followed by the 2007 children’s comedy Son of Rambow.

He begins work on his next film, The Kid, a true-life story of desecrated childhood, next month. In it, he plays a young boy who suffers terrible abuse at the hands of his mother. “It’s sort of horrific. I’m abused really badly. My mum beats me until she’s too tired to carry on. She breaks my hand in a mangler,” he says earnestly.

I say it must be hard to act in a scene like that and his previous scorn returns: “Well I haven’t done it yet, so we’ll have to see.”

But, as for many child stars before him, Asa has had second thoughts. In an interview with The Times he said that he did not want continue his career on the silver screen. He says it was because of missing his friends and family, who he did not see for the three-months of filming.

But now that he is back at school in Stoke Newington, he has changed his mind: “Seeing as I’ve had loads of press now – well, not that much – and some nominations, I reckon I probably want to be an actor now.”

Violence and insecurity are no longer the most pressing concerns for most Iraqis since the invasion in 2003, a poll released yesterday has found.

Figures from a survey conducted in February for the BBC and others show a marked increase in the optimism of many people and a change to more conventional preoccupations, such as unemployment and the economy.

Perceptions of national security have shown a marked improvement, with 85 per cent of all respondents agreeing that the current situation was very good or quite good, up 23 per cent on a year ago. More than half say that security has improved in the last year, up 16 per cent on figures from March 2008 and nearly three in five say they feel safe in their neighbourhoods, up 22 per cent.

There was a 14 per cent increase, to 60 per cent, of those who think things will be better in Iraq as a whole in a year from now.

Speaking at a press conference at the Foreign Press Association, Haider al Abbadi, a member of the Iraqi Parliament and Chair of its Economic and Reconstruction Committee, confirmed this feeling of optimism.

In measured tones, he quoted the statistic that the number of violent and terrorist incidents had fallen by 90 per cent in the last year. He said: “There has been a marked development in the security field and, in my opinion, the improvement in security has passed the no return line.”

However, he argued that improving the economy and creating jobs were vital if security gains were to be maintained. Unemployment in Iraq is currently at 15 per cent, a figure which al Abbadi argues could provide fodder for dissident groups. He said:

“Of course there is unemployment in every country. But in Iraq, unemployment is more difficult and more complex because there are many criminal and terrorist organisations that try to recruit unemployed people.

“It is in the interest of the country to create jobs.”

The Iraqi government have long been voicing their committment to diversifying the country’s oil-dependent economy into agriculture and trade. More than 1,000 of the dispossessed “intellectuals” that left the country in the wake of the 2003 invasion have reportedly returned to the country over the last year and officials claim that there has been much interest in construction contracts from China, Jordan and Iran.

However, the planned reconstruction works face severe pressure from the financial squeeze. Despite several loans from Asian countries, including Japan and China, the proposed budget of $56bn has still not been ratified by the Iraqi parliament due to the decline in profits from oil exports, which are currently priced at under $40 per barrel after a high of $150 last summer.

This stagnancy in economic development could potentially destroy the fragile peace that has settled over Iraq. Earlier this month, Army Lt. Frank Helmick, commander of Multinational Security Transition Command, said that Iraq’s shrinking budget may force the parliament to choose between the economy and security.

“They are many, many hard decisions that they are going to have to make”, he said.

The Job Centre on Barnsbury Road presents a bleak prospect. Inside the packed reception, an air of resigned despair clouds the room that no amount of neon lighting or brightly-coloured wall designs can dispel.

Set back on a small side street off the Barnsbury Road, the Barnsbury Job Centre Plus stands like a testament to ‘Broken Britain’; outside, teenagers in hoods skulk around, smoking and shouting. Ironically, cutbacks forced the other Job Centre on Upper Street to close last year.

Islington has been hit hard by the downturn in the job market. Job Centre figures show that there were nearly 1,500 redundancies in the borough at the end of last year – 20 per cent of the London total. The number of vacancies on offer is at its lowest level since records began in 2001, according to the Office of National Statistics, offering the unemployed little hope for the future.

Ben White, 32, from Barnsbury, used to work as a manager in a local accountancy firm. Six weeks ago he was made redundant due to severe cutbacks and he has been unable to find a suitable job since. He stares at the floor, sucking hard on his cigarette. “There’s just nothing decent out there,” he says adamantly.

“I used to make a good salary and enjoy my job. In there [the Job Centre] there’s nothing but shit.”

A trawl of the Job Centre computer system confirms his claim. Of the 2,957 jobs advertised in the local area, the majority offer between £7 and £9 an hour and at least a third bear the grim maxim “exceeds the national minimum wage”, the legal pay requirement of £5.73 an hour for workers aged over 22. Even these vacancies at the bottom of the pay scale require extensive expertise.

An advertisement for a council PA not only demands that the applicant “MUST have relevant experience in the public sector”, but also shorthand, advanced IT skills and audio typing. Another for a Construction Design Manager, which promises to pay only “above the minimum wage”, requires a degree in engineering or equivalent, a mandatory four years at university.

At the higher end of the scale, there were a few vacancies for plumbers and electricians, although the hourly wages on offer were between £10 and £15 an hour, a tenth of the £100 plus an hour wages offered a year ago. The future looks bleak, even for those with essential skills. Unemployment in Islington rose by 0.5 per cent above the national average at the end of last year to 6.6 per cent, aggravating an area already divided by wealth.

Bridget Fox, a local Liberal Democrat campaigner, warns that this trend could have long-term effects. “One of the biggest challenges is the growing social exclusion of some young people,” she says. “The longer they stay out of work, the less suited to and able to cope with work/hold down a job they may become.”

Today, while trawling the blogosphere, I stumbled upon a post by one of my fellow opinionaters that has left me utterly bemused.

Caleb Land, who describes himself as “the Student Pastor at Mabel White Memorial Baptist Church in Macon, GA” posted a quote from W. Bradford Wilcox, Associate Professor of Sociology at the University of Virginia, saying:

“…the more the state steps in to reduce the economic and social insecurity of its citizens, the less likely fair-weather believers are to darken the door of a church on Sunday. Now, to paraphrase Charles Krauthammer, Obama hopes to expand the size of the welfare state by offering cradle-to-grave health care and cradle-to-cubicle education to Americans. If he gets his way, Americans will not have to trust in God, or their fellow congregants, to support an ailing parent, or to help them figure out how to pay for their daughter’s college tuition. Instead, they can put their faith in Uncle Sam.”

Willcox cites a study of religion in 33 countries by Anthone Gill and Erik Lundsgaarde, political scientists at the University of Washington, which indicates that there is an inverse relationship between faith and state spending on welfare.

He argues that “the nanny state [Obama] is seeking to build will likely crowd out religious institutions in America”. Without religion, he says, “social solidarity [goes] down and social pathology – from drinking to crime – [goes] up.”

Not only does this argument confirm the line that atheists have been taking for hundreds of years – that people only turn to religion in desperation, as articles chronicling the increase in churchgoers since the onslaught of the recession have noted – but it actually seems to suggest that the healthcare system will cause a rise in crime.

Are we seriously meant to believe that people not having to beg for help to send their children to college is a bad thing? And as for the idea that with better state care fewer “fair-weather believers will darken the door of a church” – surely this is not genuine faith and certainly not the kind that the Baptists advocate?

The American electorate turned away from the Bush regime because they finally saw that it was morally bankrupt, elitist and, above all, greedy. They have placed their hope in a man that claims to be none of these things. His dedication to universal healthcare is the greatest proof of this to date.

The future is uncertain and the path is dark. But for those who wish to provide a safety net for the most vulnerable and who value the fundamental Christian values of faith, love and charity above the powerplay statistics of congregations attendance and funding of religious institutions, Obama is the light at the end of the tunnel.